With structured finance performance having peaked for many sectors, analysts at Fitch Rating and S&P Global Ratings anticipate some modest asset-level deterioration in 2017 – most notably in both prime and subprime auto ABS. On the other hand, they expect relatively stable performance from credit card ABS. “Both prime and subprime auto ABS loss rates could be...

Issuance of prime non-agency mortgage-backed securities fell sharply during 2016 from already low issuance levels, according to a new ranking and analysis by Inside Nonconforming Markets. Forecasts for issuance this year are largely subdued, with some industry analysts noting that the prime non-agency MBS market is “in limbo.” Some $9.32 billion in prime non-agency MBS were issued in 2016, a 22.8 percent decline from the previous year. Issuance volume ... [Includes one data chart]

A number of large investors that purchased non-agency mortgage-backed securities before the financial crisis have indicated that they won’t be willing to invest in new issuance until issuers standardize representations and warranties. “Investors have lost confidence in the architecture of this market,” an investor said in December at the Structured Finance Industry Group’s RMBS Symposium, which was produced by Information Management Network. The investor was frustrated ...

Ginnie Mae guaranteed a total of $507.46 billion of single-family mortgage-backed securities in 2016, its biggest annual volume ever, according to a new analysis and ranking by Inside FHA/VA Lending. That was up 16.4 percent from the agency’s previous record of $435.80 billion set in 2015. (Those figures include MBS backed by FHA home-equity conversion mortgages, which are not included in the table below or in the rankings on pages 3-5.) In 2016, Ginnie guaranteed $497.03 billion of MBS backed by traditional forward mortgages, also a record, which was up 16.9 percent from the previous year. The biggest factor in last year’s record-setting production was the boom in VA lending, particularly VA refinance loans. Issuers securitized a record $203.03 billion of VA loans last year, up 33.0 percent from the 2015 total. Some 54.3 percent of those loans were refinance transactions. Total VA refi loan ... [4 charts]

Mortgage lenders delivered a hefty $299.25 billion of single-family home loans into the mortgage-backed securities platforms at Fannie Mae and Freddie Mac during the fourth quarter of 2016, according to a new Inside Mortgage Finance analysis and ranking. Production in the final three months of 2016 was up just 5.7 percent from the third quarter at the two government-sponsored enterprises. But it was the biggest output since the second quarter of 2013, when the mortgage market was wrapping up a 12-month binge of activity with $337.74 billion in Fannie/Freddie MBS issuance. The strong finish – GSE business was up in each quarter of 2016 – put...[Includes three data tables]

A year from now, PHH Mortgage likely won’t be around, at least not as a conventional mortgage-banking franchise that originates residential loans and retains servicing rights. That’s what analysts and investment bankers who follow the stock now believe, especially in light of the company’s recent announcement that it will sell its $72 billion portfolio of Fannie Mae/Freddie Mac mortgage servicing rights to New Residential Investment Corp. for $612 million or 84 basis points. Once completed, the sale – along with a pending disposal of its Ginnie Mae MSR – will leave...

Small servicers have significantly outpaced larger servicers in terms of growth in the past year. While many nonbanks focused on servicing nonperforming mortgages in the past, the more recent growth by small servicers has been in performing mortgages, including those originated in-house. The total unpaid principal balance of single-family mortgages outstanding at the end of the third quarter of 2016 was $10.11 trillion, up by 1.6 percent, according to the Federal Reserve. Growth was...

Fannie Mae and Freddie Mac are expected to launch a study of mortgage servicing in 2017 and research ways to reach underserved borrower groups, but the new “scorecard” for the government-sponsored enterprises doesn’t portend big changes in their credit-risk transfer programs or the emerging common securitization platform. The most significant new initiative in the 2017 scorecard released by the Federal Housing Finance Agency this week is a new project to assess the mortgage servicing business model. The language is somewhat vague and broad-reaching: “initiate a multiyear assessment of both the challenges facing the mortgage servicing market and potential solutions for identified issues.” The new game plan specifically mentions...

Jim Parrott, a senior fellow at the Urban Institute and owner of Falling Creek Advisors, last week outlined three steps industry participants and federal regulators could take to boost issuance of non-agency MBS. The proposal involves the establishment of a self-regulatory organization, regulatory relief for MBS that meet standards set by the SRO, and allowing non-agency MBS to be issued through the common securitization platform being developed by Fannie Mae and Freddie Mac. Parrott detailed...

In the past few years, efforts facilitated by the Treasury Department and the Structured Finance Industry Group have helped develop standards for a deal agent in non-agency MBS. The concept took a major step forward last week when SFIG published a draft deal-agent agreement. However, the agreement didn’t delve into the specifics about how a deal agent would be compensated and industry participants have a wide range of opinions on the issue. A lawyer involved with the creation of the deal agent standards said...